Monday, June 30, 2014

(Image from global warming art). In this post, I argue that nuclear energy ceased to be a viable option in the world's energy mix as the result of the disappearance of the subsidies it received in the form of plutonium purchases by the military. This event was accompanied by a demonization campaign that forever destroyed the reputation of nuclear energy as an environmentally benign technology. In this story, there are several points of contact with the present situation with renewables, targeted by a demonization campaign destined to prolong the agony of fossil fuels. (note, this post was slightly modified on Aug 2014 in response to requests to clarify that the civilian nuclear industry never "sold" plutonium to the military. This was clear to the author from the beginning, but the way the older version was written could generate some misunderstandings)

So far, no energy transition has been planned or managed in advance. Moving, for instance, from wood to coal or from coal to oil was the result of price mechanisms which made the transition convenient for everybody. There never was any need for governments to subsidize diesel locomotives to replace steam ones.

Today, we are going through a new energy transition, one that will take us from fossil fuels to renewable energy. The problem is that price mechanisms, alone, may not be sufficient to drive the transition fast enough. Hence, many governments have enacted rules and created incentives designed to favor renewable energy. These measures have been successful in promoting the growth or renewables, but, right now, the incentives are under attack everywhere in a situation of increasing competition for ever diminishing resources. So, the transition is at risk.

As it is often the case, the past can be a guide for the future and we can learn something by looking at a past case of a failed energy revolution: nuclear energy. This story is worth retelling today because of the many points which are starting to appear surprisingly similar to the present situation with renewables.

_____________________________

The nuclear industry started, literally, with a bang; with the first nuclear bomb of Alamogordo in 1945. But nuclear reactors are older than that. The Alamogordo warhead used plutonium produced by the first nuclear reactor in history, the "Chicago Pile" which had started operating in 1942. It had been built exclusively to produce plutonium for military purposes, just as the other reactors built during the same period. These early reactors generated a lot of waste heat and it was soon clear that this heat could be used to produce electric power. That was the origin of the concept of "atoms for peace", popular in the 1950s.

In the mid 1950s, the first commercial reactors for the production of electric power appeared and, subsequently, nuclear energy production grew rapidly, to the point that it seemed possible to create an energy system based entirely on nuclear sources, at least for the production of electricity. It was a moment of great optimism and the age of electricity "too cheap to meter" really seemed to be around the corner.

But, in the 1970s, something happened that brought the expansion of the nuclear industry to a screeching halt. From the mid 1980s onward, the number of new reactors has been barely sufficient to replace the old ones, with the total production of nuclear energy slowing down its growth and showing a decline during the past few years (image on the right from Wikipedia). The nuclear industry failed its objective of becoming the world's main source of electric power; a market that was instead kept by fossil fuels; in particular by coal.

Various interpretations have been proposed to explain the decline of nuclear energy. Often, several different causes are said to have acted together as you can read, for instance, in "Ten Blows that stopped nuclear power." By far, however, the most popular interpretation seems to be that the nuclear industry was killed by the growing environmental movement. It is an interpretation that pleases both nuclearists (it gives them someone to blame) and environmentalists (who see themselves as a powerful force in the issue).

These explanations make some sense. But do you really believe that as many as ten causes all acted in the same direction to explain such a clear trend as the nearly complete stop to the construction of new reactors? And do you really think that the environmental movement could have such a success in bringing on its knees a supposedly healthy industry, considering the success that the same movement is now having, for instance, in stopping the emissions of greenhouse gases from coal plants?

Rather, I propose here that there is a clear single cause that brought nuclear power on its knees in the 1970s. It was, simply, that nuclear energy stopped being subsidized by the US government. At that point, building new plants became unprofitable and the expansion of nuclear power stopped.

The question of the subsidies needs some explanation, because the nuclear industry often claims it needs none. A list of subsidies is given in the 2011 report by Doug Koplow, who,
however, seems to have missed what was probably the historically most
important subsidy to the Western nuclear industry: the production of plutonium for the US military
to be used for military weapons. This market was probably of the same order of magnitude as that resulting from the sales of electricity (for an estimate of the budget involved, see note at the end of this post)

With the expansion of nuclear power, the production of plutonium increased in proportion. But, in 1977, the US senate approved a law forbidding the reprocessing of spent fuel from nuclear plants nuclear plants to produce plutonium. In a sense, it was a badly needed decision, since the growing production of plutonium was creating an economic and strategic disaster. The risk of nuclear proliferation increased with the amount of plutonium produced and the number of warheads in the US and in the URSS military systems was growing out of control with more than 30,000 nuclear stockpiled in the US alone. That gave to the concept of "overkill" a whole new meaning (image source). Apart from the strategic problems it created, plutonium purchasing was also a considerable financial burden for the US government, at that time in a serious financial difficulties generated by the ongoing oil crisis.

The disappearance of the market for plutonium reprocessing was a major blow to the nuclear industry. Not so much in purely economic terms, because the civilian nuclear energy never could produce plutonium - they were not equipped for this purpose. But it cast a general doubt on the financing of new plants since the original market for which they had been developed - military plutonium - had disappeared. As a result, in the tight financial moment of the late 1970s, it became nearly impossible to find the resources to pay for new nuclear plants. Coal plants could produce higher revenues at smaller initial costs and it is there that investments in energy production were directed. In a sense, we can say that the nuclear industry was a victim of the crisis of the industry that it was supposed to replace: the fossil fuel industry.

The (apparent) end of the oil crisis in the second half of the 1980s eased the world's financial situation, but it didn't help the nuclear industry, which had failed in developing lower cost technologies and still couldn't compete with fossils at the low prices of that period. The new crisis of the first decade of the 21st century reversed again the trend. Today, we see new claims about the need of going nuclear and some evidence of new nuclear plants being programmed. But this nuclear renaissance is slow to start and it may do little more than replace the obsolete plants which badly need to be scrapped.

An interesting point in this story is how stop to the nuclear subsidies was accompanied by the demonization the nuclear industry. Up to the early 1970s, environmentalists had been generally neutral and often favorable to nuclear energy. Afterward, instead, the tide turned decisively against nuclear energy, with the fortunate slogan "Nuclear? No thanks" created in 1975. We have no evidence that the anti-nuclear campaign was masterminded by some secret agency (but it cannot be ruled out, either). What we can say is that the campaign was extremely effective and in turning nuclear power into the absolute bugaboo of all environmentalists.

_______________________________

Now, let's move forward to our times and let's look at the situation of renewable energy. The similarities with the story of the nuclear industry stand out clearly. The renewable industry enjoys significant subsidies from governments and grew rapidly to production levels comparable to those of the nuclear industry. Whereas nuclear subsidies were generated mainly by military needs, subsidies to renewables have been generated by the perception of the horrendous external costs of both fossil and nuclear energy. In the first case (fossils) mainly in terms of climate change, in the second (nuclear) in terms of proliferation, contamination, etc.

The problem with external costs, however, is that they are paid by the whole community while the profits of the activities generating them go only to the owners of the plants. Hence, when subsidies or "internalization" start to bite on profits, fossil lobbies will start fighting back. One of the ways they have to undermine public support for renewables is to use demonization campaigns in the media. These campaigns are especially evident in wind power, but also for photovoltaic power and other clean energy technologies. It seems that this approach is starting to pay off for the fossil lobby. Today, a significant fraction of the environmental movement seems to be considering renewable energy almost as evil as nuclear energy.

We are not yet to the point to see the diffusion of slogans such as "Photovoltaics? No thanks" but never underestimate the power of media and the gullibility of people. PR campaigns tend to generate entrenched legends which, in the long run, are extremely difficult to dislodge from the collective perception. We have examples of this behavior with the demonization of the study "The Limits to Growth" of 1972 and, today, with the demonization of climate science. There is a real risk that a well financed negative PR campaign coupled
with punitive financial measures could reduce the renewable industry to something
similar to what the nuclear industry is today: obsolete plants and old
men reminiscing of past glories.

But the transition to renewable energy is the only hope we have to overcome the resource crisis and the climate crisis we are facing. Renewable energy is showing rapid progress: costs are going down, efficiency is increasing, and new solutions for energy storage are being developed. Renewable energy is now a credible competitor for fossil fuels even without subsidies and it needs not suffer the same failure of nuclear energy. But we need to watch out for a last ditch attempt of the fossil lobby to get rid of a competitor by lies and slandering. We need to keep the momentum for the transition to a better world. And to keep it, we must fight for it.

____________________________________________

Note: plutonium and the nuclear industry. I haven't been able to find data on how much money the military paid for the plutonium they used for nuclear warheads during the 1960s and 1970s. Maybe it is still a military secret, but we can at least make a rough estimation.First of all, the total amount of plutonium produced for the US military alone is of some 111 metric tons (source). Since plutonium does not exist in the Earth's crust, all of it must have been created in nuclear reactors. How much is this plutonium worth? At present prices, plutonium is said to be worth something between 1000 and 5000 $/g (source). So, all the plutonium stored by the US military is worth something of the order of 100 - 500 billion dollars. No peanuts, indeed Now, consider that this sum was paid in an arc of time of about 20 years and that today the nuclear industry in the US sells about 40-50 billion dollars of electric power (source). We see, therefore, that the subsidy to nuclear energy coming from the sales of plutonium was very significant.Let's try another approach. A 1 GW nuclear plant was reported in 1976 to generate something like 250 kg of plutonium per year (source). At today's prices, that could be worth between 250 million dollars and one billion dollars. According to the data available (source) a total nuclear capacity of 100 GW in the US generated 790 million MWh, that is, about 8 million/MWh per GW of nominal power. Let's take a value of 50 $/MWh (source), it follows that a 1 GW nuclear reactor generates revenues for 400 million dollars per year. Again, we see that the plutonium produced by the reactor worth a significant fraction of the revenue from electricity sales, perhaps even more than that!

Of course, these data are obtained using the present plutonium prices; at the time, prices were surely different. And note also that the civilian nuclear industry never could "sell" plutonium to the military - they couldn't do that because they lacked the facilities to extract and refine plutonium (of the right isotopic composition) from their spent fuel. They just provided their spent fuel rods to specialized plants which would extract and refine plutonium 239 which then was transformed into weapons or stockpiled. The calculation is just an estimate of the value of the plutonium production during the heydays of the nuclear industry, and that must have provided a significant benefit to the industry.

Monday, June 23, 2014

Water produced by condensing humidity from the air using solar energy. Starring Francesco El Asmar. Photo by Ugo Bardi

When we started working on producing water from atmospheric humidity, myself and my friend and colleague Toufic El Asmar thought it was a mad idea. Energy is expensive and water condensation requires a lot of it. Yet, as we kept working on the concept, we found that it made sense. Sure, it takes energy, but, with the progress of technology, renewable energy is becoming cheaper and cheaper. And at some moments, renewable energy really costs zero. At those moments, you should store it, but storage is the expensive part of renewable power. So, why not transform solar energy into something that you can store at little or no cost, for instance clean, drinkable water? After all, water is fast becoming a scarce commodity in many regions of the world.

So, the idea was born of a "solar water machine" which uses electric energy from photovoltaic panels to drive a water condenser which collects humidity from the air. The water is then filtered and made drinkable by adding a small amount of natural salts. The machine is more complex than this; it also collects rainfall and it can clean and purify water from almost any source, producing up to two hundred liters of pure water per day. Its solar panels make it completely self-sufficient: you may place it anywhere; it doesn't need to be connected to the grid (although it may be). So, it is good for remote places, for emergency situations, and for a variety of needs. Here is the "Acqua dal Sole" system, the day of its official presentation in Capannori, Italy. The people involved in the project are lined up in front of the machine (including yours truly).

Now that I told you the essential, let me tell you some more details about this idea. It all started some years ago, when myself and Toufic El Asmar prepared a project about using solar collectors to produce air conditioning for North African and Mid-Eastern Countries. The idea was that these countries enjoy a high solar insulation, which could be collected using parabolic mirrors to heat up an absorption air conditioning system. The project was approved by the European Commission with the name of "REACT" and it led to the manufacturing of two prototypes, one in Morocco, the other in Jordan.

As time went by, however, the rapid fall of the price of photovoltaic panels made parabolic solar collectors obsolete. But while working on the React project, we noticed how solar refrigeration could produce a lot of water by condensation from the air. That led us to study the subject more in detail and the European Commission sponsored a project called "Aqua Solis". Our idea was to study an approach completely different than the large scale desalination plants which are commonly used nowadays to produce water for dry countries. The idea was to develop "village scale" systems; improved versions of the old "solar still" idea. Cheap, simple, and with no need of the expensive pipeline systems needed for the conventional desalination plants. The basic idea was to create versatile systems which could use photovoltaic energy for water production, but also for any use needed at a particular moment

In time, this study evolved into a patent filed by me (Ugo Bardi) and Toufic El Asmar and to a working device: the "Acqua dal Sole" system, built by the Italian companies Sinapsi and Sinerlab, on a project by Archistudio. The "Acqua dal Sole" system is at present located in an area close to the airport of Capannori (near Lucca, in Italy) where a high tech aeronautics company, "Zefiro" has kindly offered space for a test. The water produced is free for anyone stopping by, although for bureaucratic reasons you will read on the tap the sign "not drinkable" (in Italian). But it is perfectly drinkable and very good, I can tell you that!

We are looking at practical applications and markets for this device. Of course, that depends on the cost but, as the prices of PV keep falling, it is likely that water from the air could be a revolution in the way water is produced in the world, especially in areas where it is badly needed. And also on the way renewable energy is stored.

Once you have seen the "photovoltaic camel" you can understand how fast the range of applications of PV panels is growing. Photovoltaicsis an emergent technology which has the possibility of reshaping the world in ways which, at present, we can't even imagine.

Saturday, June 14, 2014

In this post, professor Tatiana Yugay, of the Moscow State University of economics, reports from Saint Petersburg about the recent Russia-China deal. See also a previous post on the subject.

By Tatiana Yugay

In my previous post at Ugo
Bardi's blog, I suggested that “Russia
but not the U.S. has been pivoting to Asia just now”. Since
then several landmark events happened in the Asian arena, such as,
Vladimir Putin's successful visit to China and the conclusion of a $400
billion gas mega-deal between Russia's Gazprom and China's CNPC along
with other important 50 agreements, the Russian-Chinese navy drills
in the East-China Sea and Obama's visit to East Asia in order to
alert his Asian allies. Last but not least,
signing
the Treaty on the Foundation
of the Eurasian Economic Union took
place in Astana at the end
of May.

On May 23-24, I had a
chance to participate in the Forum of Russia's and China's Leading
Economists which was hosted by the St.
Petersburg State University of Economics. By a happy coincidence,
the Forum took place right after the conclusion of the millennium gas
deal between the two countries and, moreover, contemporaneously with
the St.
Petersburg International Economic Forum.
Though our event was a much more modest
one, all the participants felt their involvement
withmainstream geopolitical developments.
The atmosphere was very vibrant,
friendly and a sort of triumphant.
In
fact, we felt ourselves as if we
were participating
in the St. Petersburg International Economic Forum since the agenda
of both forums were
somehow overlapping, including
a key
topic of
the
Russian-Chinese
strategic economic partnership.

It is needless to say that the gas deal was
on everyone's lips. I
was pleasantly surprised that the attitude
of the Chinese speakers was very similar to my own
vision.
It is clear that the scientific
communities of both
countries are more
free to express their views
than the political leadership. Recently,
Russian policymakers do
not hesitate to express their opinions in strong and
sarcastic terms and
the general public enjoy this fact. On the
other hand, the Chinese leadership is rather
careful in its
wording and expresses its position rather
indirectly. On the
contrary, the Chinese
speakers at our
Forum
were even
more tough while
expressing their attitudes towards the U.S. policy than their Russian
counterparts. They accused
the U.S.of the
“new regionalism” aimed at excluding
China and Russia from shaping new international trade rules in
the framework ofTrans-Pacific
Partnership Agreement (TPP) and Transatlantic Trade and Investment
Partnership (TTIP). Both Russian and
Chinese participants
agreed that the US domination destabilizes
the world and exerts direct threats
to national security of our countries.

In
my presentation, I presumed that Russia
and China should
give asymmetric
geoeconomic responses to the latest geopolitical threats, avoiding
direct confrontation.
Since
the U.S.
isstill
stronger economically, politically and militarily than China and
Russia and,
mainly, because all three countries are the members of the nuke club
and the world is already dangerously balancing on the brink of the
world war.

In my opinion,
soft
asymmetric
responses shouldnot
be
directedstraightforward at
a potentialadversarybutrepresentelaborate
strategies aimed at creating international configurations or
alternative ways out of a
crisis situation.In
these latter days,
Russia
has
been masterminding such kind of long-term solutions. Instead
of involving itself in a fruitless tit for tat sanctions game, Russia
has been forging its Asian-Pacific pivot.

Ahead
of striking the mega-gas deal and in the aftermath, there was
no shortageof
speculations about its geopolitical significance.
A
repeating key-note was
that China had an upper hand because of Western sanctions against
Russia. The commentators presumed that Putin
was going to China as a suppliant
and would be forced to submit to Chinese tough
conditions. Frankly speaking, I was seriously concerned when at the
end of the first day of
his visit
the contract wasn't yet
signed and I saw Putin's sober face. The tension continued on the
next day and only in the afternoon it was announced that the deal was
struck.
However, there was
still
remaining
a sort of
ambiguity about the price of the gas that could serve as the main
indicator of whose hand was the upper one. Gazprom
regards the price
as
a
commercial
secret and didnn't
reveal it.
So
the analytical community both in the West and in Russia made a lot of
guesswork. A simple math supposes that if the total price ($400
billion) and the
quantity (38 billion cubic meters) are known then the average price
can be $350 per 1,000 cubic meters.

The Western commentators hurried
up
to
admit that “Given
the costs announced so far, this project will yield a subpar return
for Gazprom under today’s assumptions—maybe high single digits or
low double digits. This
will not be Gazprom’s most profitable endeavor”.
However,
the
head of the Gazprom export arm Alexander Medvedev said the
gas price
would be well above $350 per 1,000 cubic meters.
At
that, Gazprom
and China have preliminary agreed on a $25 billion advance payment
for gas supplies. Konstantin
Simonov, director general of the National Energy Security Foundation,
thinks
that the widely reported sticker price of $350 per 1,000 cubic meters
is a simple oversimplification. He
explained
thatunder
the contract, supplies of Russian gas via the Eastern route will
reach the full capacity of 38 bcm a year only after the fifth year of
supplies. During the first five years deliveries will be only 16 bcm
annually. This
means that the total gas supply will exceed a trillion cubic meters
and the
price will come closer to $390.

Important for Russia,
the agreement includes a base price formula with reference to oil
prices. Russia
was
determined to protect this price formula notwithstanding
China's tough
resistance.
The
pricing of Russia's gas sales to Europe is based on an oil price
reference formula. Given the high oil prices, the oil-based price
formula for natural gas allows Russia to sell its gas at a higher
price than if it were based on spot-market natural gas prices. On
the other hand,RBC
Capital Markets analysts
said implied terms will give China a steady supply of piped-in
Russian gas at a price about
25-40 percent lower than the current cost of importing liquefied
natural gas from overseas. So
the deal is beneficial for both parties.

Gazprom
expects that
the contract with China will affect gas prices in the European
market,
Aleksey Miller, head of Gazprom said at the St. Petersburg
International Economic Forum. "Firstly we assume that the
signing of this contract will impact European gas prices. Secondly,
the competition for Russian gas resources has begun yesterday,”
Miller said. “The Asia-Pacific is not only the largest and dominant
market, but it is the Asia-Pacific market that is influencing the
European and North American markets”.

A
greater geopolitical vision of the gas deal is expressed by Ulson
Gunnar,
“Finally, Russia
and China’s constructive energy partnership, concluded without
territorial, economic, or legal integration, will lend further
credibility toward a future multipolar global order, while
simultaneously exposing the shortcomings, even follies, of the West’s
unipolar system of pursuing hegemony through costly and ultimately
unsustainable global integration».

Immediately
after striking
the deal which
was long in advance nicknamed by the Western media as Putin's Holy
Graal,
it was labeled
as Russia's
Asian
pivot. As
Patrick
L Youngputs
it, “Placed
in perspective, while a massive deal it is only expected to be around
10 percent of Chinese demand by 2020 (according to Nomura). That
means there is much more scope for Russia to increase its supply in
due course. Russia’s pivot to the growing markets of the east is in
full swing”.

Properly
speaking, inking
a gas deal wasn't thebeginning but a spectacular display of
a very careful and thoroughly adjusted
process of Russia's return to the Pacific. The
deal was just an ultimate piece of smalt which made the whole mosaic
visible to the general public.
In fact,
the Western analytical community has been
alerting their governments about potential Russia's shift to the East
long ahead of the Ukrainian crisis and even before Putin's
re-election.

Gazprom
and CNPC had
been negotiating the gas deal during a whole decade, and when it was
finally finalized Russia has succeeded in concluding
a bulk of trade agreements with other north-eastern states.
As
well.
Another landmark project is to double
connect
North and South Koreas by means of pipelines and railways. On
June 5, Russia’s
Minister for Far East Development Aleksander Galushka announced the
plan to extend the Trans-Siberian Railroad in
order to provide
a link between the Korean peninsula and Europe. The link will
extend the world’s longest railroad and
make
Russia a major transit route between Europe and Asia. Shipping by
rail is nearly 3 times faster than via the Suez Canal, Russian
Railways CEO Vladimir Bakunin said.

Cooperation
between the two Koreas on the railway could lead to compromise on a
long-delayed plan to build gas pipelines and connect both Koreas with
Russian gas. Russia's
Gazprom and the DPRK's Ministry of Energy have reached an
understanding to build a natural gas pipeline that would enter the
DPRK at the Khasan crossing of the Tumen River on the Russia-DPRK
border. The pipeline would then extend through the DPRK to the
Republic of Korea (Korean Gas Co). South Korea is the 10th largest
consumer of energy worldwide and the second largest importer of LNG.
Russia first agreed to export LNG to South Korea in 2005, and
agreements this year include South Korean support for modernizing the
LNG fleet and investing in Russian Far East development. Seoul is
especially interested in partnering with Russia as an alternative to
nearby China and Japan. Russia is ideally positioned to export to
South Korea because of the proximity of the two.

In
order to boost the deals,
Vladimir Putin recently
signed into law an
agreement that will write off much of DPRK
Soviet-era loans. Russia will forgive 90 percent of North Korea’s
debt from the Soviet era, leaving $1 billion to be repaid interest
free in the next 20-40 years. At
that,North
Korea will grant Russian firms access to its natural resources
in exchange for imports and investments. In
January, a UK-based private equity firm SRE Minerals Limited said
North Korea had the largest rare earth oxides deposits in the world,
an amount of approximately 216 million tons. Rare earth elements
(REE) can be used in many sophisticated technologies, from cell
phones to guided missiles.

During
his four-day visit to Vietnam and South Korea in
November 2013,
Putin signed a series of documents to enhance Russia's cooperation
with Hanoi and Seoul in the economic, energy, military and
humanitarian sectors. Thus,
Russia
will help
Vietnam with hydrocarbon extraction, and possibly sell LNG to
Vietnam, along with its ongoing support for the Vietnamese navy and
nuclear power. Vietnam’s coast is accessible from ports in
Russia’s Far East. For that reason, Russia sees Vietnam
as an attractive energy partner not
only in its own right but also as a gateway for Russian exports to
other Southeast Asian nations. Using Vietnam as a corridor to
Southeast Asia would allow Russia
to
diversify
its energy trade and avoid excessive dependance
on Chinese
exports.

India
is an ancient trade partner and loyal political ally which has openly
supported Russia
amidst the Ukraine crisis. The countries are involved in high-tech
military cooperation and Russia is
atop
arms provider to
India. Surprisingly enough, their
energy cooperation has got a random character. One
of the major barriers to greater energy partnership
between India and Russia — particularly for crude oil — is the
lack of infrastructure to transport the crude. Currently,
Russia
and India are negotiating the construction of a $30 billion oil
pipeline—the
most expensive ever—to connect Russia’s Altai mountain region to
the Xinjiang province in northwest China and then to northern India.
India
also can be interested in buying LNG
from Gazprom's
Sakhalin-2 terminal. At
the time being, the main beneficiary of Sakhalin-2
is
Japan. A
new LNG plant in Vladivostok aims to ship 10 million tons from 2018
and will be connected to the continental gas production centres such
as Yakutia and Irkutsk oblast. Novatek, Russia’s largest non-state
gas producer, initiated another LNG Project on Yamal peninsula. It
will start producing LNG in 2016 and supply 16.5 million tons per
year of the tanker-shipped fuel by 2018.

Naturally,
Russia's beginning pivot to Asia was not at all welcome in the West.Gal
Luft in
a
characteristic article “Can
America Stop Russia's Energy "Pivot" To Asia?” gives
the US leadership advises how to stop Russia. They are so outdated
that I can't deprive
myself
of pleasureto
cite
them.
1) “as
guarantor of South Korean security, Washington should publicly take
a strong position against the Russia-Korea pipeline”. 2)
“Washington
should convince its Asian allies that it is committed to becoming a
leading energy-exporting country and a major player in the global
energy-trade system”. 3)
the
U.S. “should
enhance cooperation with Asia on unconventional gas. China owns the
world’s largest shale reserve. Japan is a global leader in the
development of methane hydrates”. 4)
the
U.S. “should support measures aimed at reducing LNG prices in the
Asia-Pacific to make LNG more competitive with Russian pipeline gas”.
In
fact, items 2-4 can be reduced to a single one or shale,
shale and
shale!

The
U.S. made all this mess in the Ukraine in order to promote its
shale
gas
to the EU and, supposedly, to extract it in
the
eastern Ukraine. That is why the US military advisers are so
relentless
towards the rebellious eastern
provinces.
It's
hard to believe that they offer to sell the futures of this same gas
not only to Europe but to Asia as well. In Russia, we say “to sell
the bear's skin before one has caught the bear”.
In my previous
post
I cited Gail
Tverberg's article “The
Absurdity of US Natural Gas Exports”
,were
sheexplains
why
America's gas crusadeto Europe is ill-intentioned not only against Russia but for
Europe,
as
well.
On
June
5 after the G7 meeting in Brussels, European Commission President
José Manuel Barroso made
it clearthat
the EU cannot create “the
illusion that gas from the US is going to solve our problems.”In
fact, instead of containing
Russia's pivot, the U.S. and the EU have been doing
their best to push it
forward. A ridiculous sanction's campaign is still in play. The
latest EU
suicide
attempt was to cancel the construction of the South
Stream pipeline bypassing
Ukraine.

During the last
few years, Russia
has been striving to strengthen the European energy security and to
diminish dependency
of Southern European markets from
the vicissitudes of gas transit through the unstable Ukraine.
According
to its fuzzy logic,
the European Commission told Bulgaria to suspend preparatory work on
South Stream, as it could damage EU energy security. Ironically,
all this fuss takes place right at the moment when the EU,
Russia
and Ukraine are trying hard to resolve a $3.5 bn debt
crisis
since Ukraine haven't paid for Russian gas for months. Putin has sent
two letters to EU leaders warning them that in case of continuing
non-payments, Gazprom would be forced to suspend deliveries to
Ukraine. A recent history teaches us
that in such a case the latter simply begin stealing gas from a
transit pipe. After
tough talks, Ukraine has paid a third of
the debt. What makes me laugh - that same EU Energy Commissioner
Guenther Oettinger who has been the main arbiter in the debt case,
has announced about blocking the South
Stream. After trilateral gas talks in Brussels, Gazprom Chairman
Miller has
stated, “The
EC cannot stop the construction. No one can stop us building it. Our
answer is very simple. In December 2015 the first gas along the
marine section under the Black Sea will arrive in Bulgaria and the
European Union”.

Credit: Pool photo by Alexey DruginynWhile
the West understands that it cannot reverse Russia's
shift
to the East, it is deeply concerned by another Putin's “dream”
which has been turning into reality these days. After
the collapse of the USSR, Russia
has
been seeking
to restore gradually the economic and political relations in the
post-Soviet territory
in the framework
of the Eurasian Economic Union and
the Customs Union.At
the end of 2011, Vladimir
Putin, then
being the Russia's
Prime
Minister, published
an article "A
new integration project for Eurasia: The future in the making"
("Izvestia", 3 October 2011). He
revealed his vision of further developing of the Eurasion
cooperation. An
angry reactionfrom
the other side of the Atlantic was
not long in coming.
Former
US Secretary of State Hillary Clinton referred to the project as a
“move
to re-Sovietise the region.”
While acknowledging that the Eurasian Union will not be called “the
Soviet Union,” she also stressed “let’s make no mistake about
it. We know what the goal is and we are trying to figure out
effective ways to slow down or prevent it”. Did
her ominous threat ever come true?

On
May 29, Presidents of Russia, Belarus
and
Kazakhstan has
signed the Treaty on the Creation of the Eurasian Economic Union in
Astana,which
comes
into effect in January 2015.
The goal is to create a common market between three countries with a
total population of over 170 million, with free movement of capital,
goods, services and labour. Kyrgyzstan
and Armenia are
ready to join the Treaty in the nearest future. Meanwhile,
Vietnam and Turkey are negotiating about joining the Customs Union.
After
the signing ceremony, President
of
Kazakhstan Nursultan Nazarbayev who
hosted the event, said
“a new 21st century geopolitical reality is being born”.

It
isn't at all surprising that comments on
establishing the
Eurasian Economic Union, were
rather aggressive. They labeled the EEC as a “New
Russian Empire” or a “New
Soviet Union.” They
predicted its failure, mainly, because of Ukraine'sabsence.
Neil
MacFarquharmay
wrote
a post titled sarcastically “Russia
and 2 Neighbors Form Economic Union That Has a Ukraine-Size Hole».
He
writes, “Some
analysts suggest that the loss of Ukraine as a potential member was
the death knell for the Eurasian Economic Union. On a purely economic
scale, losing Ukraine meant losing a market of more than 40 million
people. Ukraine also provided economic diversity when paired with the
two energy exporters».

Is
Ukraine so crucial for the
Eurasian project?
In order to understand the rationale behind Western reaction on
Ukrainian
developments, let's
turn to “The
Grand
Chessboard:
American Primacy And Its Geostrategic Imperatives”,
a
textbook for American presidents written by Zbigniew
Brzezinski. Four
key
statements are,
as follows, 1) “For
America, the chief geopolitical prize is Eurasia”, 2)
“A
power that dominates Eurasia would control two of the world's three
most advanced and economically productive regions”. 3)
“the
new world order under the hegemony of the United States is created
against Russia and on the fragments of Russia”.
4)
“without
Ukraine Russia ceases to be empire, while with Ukraine – bought off
first and subdued afterwards, it automatically turns into empire”.
Following
these clear instructions, the U.S. leadership has started a campaign
of tearing Ukraine
away from Russia
and
incidentally selling the idea of shale gas.

In
my opinion, Brzezinski
and
his adepts have been over-estimating Ukraine's significance for a
success of the Eurasian
integration.
Though Ukraine is
very emotionally important for Russians, from the political and
economic points of view, it was clear long
ago that
it was drifting to the West. If
we look at the chart, we can see that Ukraine
didn't take part in the Customs
Unionand
exited from the
Common Economic Space on
the early stage.Initially,
Russia was not so strong economically in order to give the country
considerable support or to compete with the US NGOs in bribing the
local elite. When
Russia began doing well and started investing in Ukraine, the latter
corrupted
and
got accustomed to milk two cows. Meanwhile,
a fatal West-East divide has been gradually corroding
the country from within. While maintaining old cooperation relations
with the east-Ukrainian
industrial
regions,
Russia was developing little by little its own industries to
substitute Ukrainian
import. Finally, the
construction
of North and South
Stream pipelines
were aimed to decreasegas
transit through Ukraine.
However,
Ukraine
will
always stay a source of political, security and humanitarian
preoccupation for Russian leadership.

Source:
http://epthinktank.eu

I
can't respond
better to those who talks about Putin's imperial ambitions, than Mark
Adomanis, who
says,
«Without lapsing into cartoonish Kremlinology, I do think it’s
noteworthy and important that Putin is so publicly and forcefully
going on the record advancing a broad program of technocratic
neoliberalism: harmonizing regulations, lowering barriers to trade,
reducing tariffs, eliminating unnecessary border controls, driving
efficiency, and generally fostering the free movement of people and
goods. Even if not fully sincere, an embrace of these policies is
healthy».

Last
but not least, an important by-product of the Asian pivot is further
undermining dollar domination, since according to the gas megadeal
and other Russian-Chinese deals roubles or yuans will be used
in mutual payments.
Trade turnover inside the EEC will be also carried out in roubles, as
well as,North-Korean deals.

Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" to be published by Springer in mid 2017

Listen! for no more the presage of my soul, Bride-like, shall peer from its secluding veil; But as the morning wind blows clear the east,More bright shall blow the wind of prophecy,And I will speak, but in dark speech no more.(Aeschylus, Agamemnon)

Ugo Bardi's blog

This blog is dedicated to exploring the future of humankind, affected by the decline of the availability of natural resources, the climate problem, and the human tendency of mismanaging both. The future doesn't look bright, but it is still possible to do something good if we don't discount the alerts of the modern Cassandras. (and don't forget that the ancient prophetess turned out to be always right).

Above: Cassandra by Evelyn De Morgan, 1898

Chimeras: another blog by UB

Dedicated to art, myths, literature, and history with a special attention to ancient monsters and deities.

The Seneca Effect

The Seneca Effect: is this what our future looks like?

Extracted

A report to the Club of Rome published by Chelsea Green. (click on image for a link)

Rules of the blog

I try to publish at least a post every week, typically on Mondays, but additional posts often appear on different days. Comments are moderated. You may reproduce my posts as you like, citing the source is appreciated!

About the author

Ugo Bardi teaches physical chemistry at the University of Florence, in Italy. He is interested in resource depletion, system dynamics modeling, climate science and renewable energy. Contact: ugo.bardi(whirlything)unifi.it